Agenda and minutes

Shareholder Committee - Tuesday, 11th September, 2018 2.00 pm

Venue: Studio 4, Guildhall Arts Centre, St. Peter's Hill, Grantham, Lincolnshire, NG31 6PZ

Contact: Jo Toomey  Email: democracy@southkesteven.gov.uk

Items
No. Item

8.

Membership

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    The Committee to be notified of any substitute members.

    Minutes:

    Committee Members were notified that Councillor Dr. Moseley would be substituting for Councillor Cooke for this meeting only.

9.

Disclosure of interests

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    Members are asked to disclose interests in matters for consideration at the meeting.

    Minutes:

    No interests were disclosed.

10.

Minutes of the meeting held on 3 July 2018 pdf icon PDF 207 KB

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                                                                                                                      (Enclosure)

    Minutes:

    The minutes of the meeting held on 3 July 2018 were agreed as a correct record.

11.

Action notes from the workshop held on 16 January 2018 pdf icon PDF 124 KB

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                                                                                                                      (Enclosure)

    Minutes:

    The action notes from the workshop held on 16 January 2018 were noted.

Exclusion of the press and public

It was proposed, seconded and agreed that:

 

The press and public be excluded from the meeting during discussion of the following item of business because of the likelihood that information that is exempt under paragraph 3 of Schedule 12A of the Local Government Act 1972 (as amended) would be disclosed to them.

12.

Award of contract - Wherry's Lane development project

    Report of the Directors of Gravitas.                                                    (Enclosure)

Minutes:

Decision

 

To approve the award of the Wherry’s Lane Development Contract to RG Carter as the preferred contractor with a view to undertaking further Value Engineering and to note the current financial cost projections set out in the Directors’ report.

 

Gravitas Directors and company representatives presented the report, which was circulated with the agenda. In so doing they reminded Members of the objectives of Gravitas, which included intervening in the housing market to inject pace into delivery and to deliver sites or types of development that might not otherwise be developed by the private sector. The Company carried out this activity with a view to its projects providing a positive return for the Council.

 

Members were reminded that planning permission had been granted in July 2018 and that the terms of the Section 106 Agreement in relation to affordable housing provision were being finalised.

 

The report had been brought to the Shareholder Committee to ask it to appoint the preferred contractor because the value of the contract exceeded the maximum value that the company directors were able to authorise.

 

The Shareholder Committee was informed that the company had carried out a tender exercise for a design and build contract for the development; the results of the tender exercise were included in the Directors’ report, together with an assessment of cost and quality. An overview was given of the process that was followed, including validation, interviews held with the top two scoring contractors and the outcome of a clarification exercise. Members also sought confirmation that the tender included all utilities on site.

 

In order to provide context to support Members’ decision-making, the Directors gave an overview of the company’s current financial position. This incorporated an update on the cashflow for the company, including projected outflow and inflow based on the award of the contract to the preferred contractor; this would need to be reviewed on a monthly basis. It would be important to the Council to ensure that the company remained solvent during the early months of the project where there would be outflow but no inflow. It was noted that some receipts may not be realised until late 2019/20.

 

Members noted that since the budget for delivery of the scheme was approved, build and material costs had increased.  The difference in funding would be sought from the Council through a loan made on a commercial basis in accordance with provisions within the Council’s treasury management strategy.

 

Benefits from the development that would be realised by the Council included  capital income from the sale of the land, income from financing the project and the balance of that on equity, costs charged to the company by the Council for the delivery of the project, council tax income and new homes bonus (based on current distribution arrangements).

 

A number of questions were asked about the structure of the contract and penalty clauses for deviation that were included so that shareholders could identify the potential risk of increased costs during the life of the  ...  view the full minutes text for item 12.

13.

Close of meeting

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    Minutes:

    The meeting was closed at 15:12.